Alabama economy expected to improve slightly

MONTGOMERY | Alabama’s economy should improve this year, but not by much, economists said at the annual Center for Business and Economic Research conference held Wednesday.

By Dana BeyerleMontgomery Bureau Chief

MONTGOMERY | Alabama’s economy should improve this year, but not by much, economists said at the annual Center for Business and Economic Research conference held Wednesday.“There are a lot of good things going on in Alabama,” said Sam Addy, the center’s associate dean for research and outreach director. “(Alabama’s economy) is somewhat better.” The annual conference by the center, which is housed at the University of Alabama, also featured analysis by a vice president of the Federal Reserve Bank of Atlanta and Retirement Systems of Alabama Chief Executive Officer David Bronner.Addy said the state’s outlook for 2013 includes a 1.7 percent increase in gross domestic product and a 1.1 percent increase in employment.“That’s not a bad story there,” Addy said.Total tax receipts will slow, however, to 3.5 percent, from 5 percent in 2011 and 3.8 percent in 2012, he said. Addy said the number of jobs in Alabama increased by 12,700 from 2011 to 2012. “A clear improvement of unemployment is good for the state as well,” Addy said.Still, 24 percent of the state’s available workers remain are either underemployed or unemployed — 482,391 underemployed and 171,200 unemployed. And it may be 2015 before the state sees significant recovery from the recession that began in 2008. The outlook for the Tuscaloosa metro area for 2013 is mildly optimistic: a 0.4 percent growth in employment. The area’s gross domestic product could grow by 1.5 percent.The area’s economy in 2012 was partly a reflection of continued recovery from the devastation by the April 2011 tornadoes, which decreased the housing stock and wiped out some retail businesses.Center officials said housing took a hit in 2011, but more single-family and multifamily homes were started in 2012. Businesses that were destroyed by the tornado began reopening or rebuilding in new locations.A total of 2,700 nonfarm jobs were lost during the fiscal year ending in October 2012, reducing Tuscaloosa metro payroll to 91,200. Most the decreases were in service-providing industries, while state and local governments lost 2,300 jobs, the center said.Tuscaloosa's underemployment was 16.8 percent, representing 23,040 people. The University of Alabama, Mercedes-Benz U.S. International and local automotive suppliers along with construction of the new state psychiatric hospital were bright spots in 2012.Each University of Alabama football game generated between $15 million and $18 million for the local economy, depending on the opponent.The Tuscaloosa metro area population increased by 0.8 percent to 221,553, and the area’s 3.5 percent increase in per capita income was on par with the state’s growth, the center said.The metro area’s median family income was $56,500, higher than the state’s average of $55,400 but just below the national average of $60,000.Alabama produced 880,000 vehicles last year, many of them for the important export market. “It’s a good story for the state,” Addy said.The bad news is the nation’s economy is still in the doldrums and the federal government is saddled with debt.The last four years saw a dismal official growth of 2 percent coupled with high debt, said David Altig, executive vice president and director of research for the Federal Reserve Bank of Atlanta. “Economists on the street say it was less than one-half percent,” he said.Bronner said Alabama’s economic future will depend largely on the auto industry, aerospace and tourism. He said expanding Medicaid and accepting more than $1 billion a year in new federal dollars is akin to economic development in the health industry.